Supermarket Sainsbury’s has become the first grocer to extend its Aldi price-match campaign to its 800 local convenience store outlets.
In a bold move by its boss to win back market share from the German discounter, Britain’s second-largest supermarket chain today (4) has added price matches on 200 daily staples — including milk, chicken, bread and vegetable oil — in its local convenience stores.
Simon Roberts, chief executive, told The Times that he had decided to roll out the campaign because customers had told him that they “really love the convenience of Sainsbury’s Local, but would really like to see value on the products we buy most often.
“What we’re seeing from customers is that they want to be sure they’re getting the best value.
“UK grocery is one of the most, if not the most competitive markets in the world,” Roberts said. “What we’ve seen is lots of new, smaller supermarkets grow in the UK, and so we have to be competitive on everyday products that customers buy, in order for them to be confident in our value.”
He added that matching with Aldi prices “gives customers real confidence”, particularly when shoppers’ budgets are squeezed.
The Aldi price-match scheme will replace Sainsbury’s “pocket friendly prices” campaign, which launched last year to help customers find cheaper items in its Local shops more easily.
Sainsbury’s is targeting between 20 and 25 new Local stores each year, as part of its ongoing expansion plan, which includes opening more larger-format supermarkets. It will open a new convenience shop at Edinburgh Airport in December, in a unit previously occupied by Marks & Spencer. It will be Sainsbury’s first airport store.
“Whether on the way to work, or travelling from a station, local stores play such an important role in people’s lives," Roberts said.
Waitrose is to open 100 new convenience shops over the next five years as part of a £1 billion investment, while Marks & Spencer unveiled plans to open ten new convenience stores this year and renew up to 50. Morrisons plans to open 400 more of its Morrisons Daily convenience stores, with a wider goal of hitting 2,000 smaller stores in 2025.
Tesco is slashing the price of more than 222 own-brand and branded products in its Express convenience stores.
Essentials including milk, bread, pasta and coffee are included in the lines which have been reduced in price by an average of more than 10 per cent at Tesco Express stores. The retail giant has made more than 2,800 price cuts across stores in recent months. With 2,048 of convenience stores at the end of the 2023-24 financial year, Tesco aims to benefit hundreds of thousands of customers from the cheaper deals.
The firm said the move comes in the wake of more than 2,800 price cuts made by the chain across its stores in recent months. From Wednesday, customers will pay £1.45 for a four-pint bottle of milk at their local Tesco Express store (down from £1.55) and a Tesco Toastie White Thick White Loaf is also 10p cheaper at 75p.
There are even bigger savings on Tesco Chicken Breast Portions (300g), which have dropped in price by 25p to just £2.25 and a 200g jar of Tesco Gold Instant Coffee now also costs 25p less at just £2.25. Among the branded products with price cuts are Warburtons White Sliced Sandwich Rolls, with the price of a six-pack cut by 10p to just £1.20 and Domestos Original Bleach 750ml, which is now just £1.19 in Express stores after an 11p price cut.
Tesco CEO Ken Murphy said, “Today’s round of price cuts on more than 200 lines in our Express stores underlines our commitment to offering great value to Tesco customers.
"Whether you are picking up coffee and milk for the office or a loaf of bread and a tin of soup on the way home, our Express stores offer both convenience and great value.”
This comes a week after One Stop, the convenience store chain owned by Tesco, has reported a surge in sales to nearly £1.3bn during its latest financial year. The Walsall-based company posted a revenue of £1.29bn for the 12 months to 24 February, 2024, an increase from the previous year's £1.17bn. Over the course of the year, the number of stores directly operated by One Stop increased from 712 to 733, while its franchised locations also grew from 291 to 317.
Chancellor Rachel Reeves's budget is expected to prove to be “a big burden for the retail industry to carry”, Asda chair Stuart Rose has said, warning that the “consequences” of the budget will lead to some price increases.
Rose said the increase in employers’ NICs and changes to tax thresholds would have “consequences” and meant it could not rule out some price increases.
“If you get presented with a bill unexpectedly for around £100m, even if you’re a business as big as us, that takes some digestion. So, we’re looking at the consequences of that, but you cannot rule out the fact there will be some inflation,” Lord Rose told the Guardian.
Rose added that the changes in last week’s budget were “a big burden for the retail industry to carry” and meant that Asda would “have to look hard at every piece of expenditure”, including the annual pay increase for staff, and may limit how many workers it hires.
“We’ve seen an increase in national minimum wage,” he added. “We want to attract good staff, but we have to look very, very hard to affordability.”
It comes a day after Asda released its gloomy numbers the slide in total revenues, excluding fuel, by 2.5 per cent to £5.3bn in the three months to the end of September, while like-for-like sales were 4.8 per cent lower than the same quarter in 2023.
Asda’s warning about the cost of budget measures comes only days after it announced hundreds of head office job cuts and a restructuring in an attempt to turn around the business.
The retailer said it would slash 475 management roles in Leeds and Leicestershire to “remove duplication and simplify structures” amid a “challenging” market. The remaining staff have also been told they will be required to spend at least three days a week in the office from January.
“We are a business that relies on teams working together. It’s not always as efficient with those teams working together in terms of online, in terms of Zoom calls," Rose said.
Asda has been without a chief executive since the co-owner Mohsin Issa stepped back from executive duties in September, leaving the retail veteran Rose in the lead role.
Rose, who had previously called on Issa to step back, said he was “embarrassed” by Asda’s performance.
“I’d like to see the business flying again, so I stick by what I said,” Rose said. “We’re in here now with our heads together, we’ve got a good management team.”
British supermarket group Sainsbury's on Thursday (7) stuck to its full-year forecast of up to 10 per cent profit growth after a 3.7 per cent rise in the first half, with robust grocery sales offset by weakness in general merchandise.
Sainsbury's strategy of matching discounter Aldi's prices on hundreds of essential items and providing better offers for members of its Nectar loyalty scheme, financed by cutting costs, is paying off for CEO Simon Roberts.
The group is also benefiting from the continuing trend of Britons dining at home more, with sales of its premium Taste the Difference range up 18 per cent in the first half.
"Our food business is going from strength to strength and we're making the biggest market share gains in the industry, with continued strong volume growth," said Roberts, adding that he was expecting another "strong performance" at Christmas.
Sainsbury's has a UK grocery market share of 15.2 per cent, the latest data from researcher Kantar shows, up 40 basis points year-on-year. Britain's No. 2 grocer after Tesco said it still expected 2024-25 retail underlying operating profit, its preferred profit measure, of between 1.01 and 1.06 billion pounds, growth of 5 per cent to 10 per cent versus 2023-24.
The group said it also still expected to generate retail free cash flow of at least 500 million pounds.
For the six months to Sept 14, Sainsbury's made retail underlying operating profit of 503 million pounds, up from 485 million pounds in the same period last year.
Second-quarter like-for-like sales, excluding fuel, rose 4.2 per cent, having been up 2.7 per cent in the first quarter.
Grocery sales rose 5.3 per cent and general merchandise and clothing sales in Sainsbury's stores were up 2.2 per cent. However, sales at the Argos business fell 1.4 per cent.
"We remain confident of delivering strong profit growth in the full year, with continued leverage from Sainsbury's grocery volume growth and a stronger Argos H2 performance," said the group.
Retailer Marks & Spencer forecast "further progress" in the balance of the year after reporting a better-than-expected 17.2 per cent rise in first-half profit, helped by market share gains, adding to evidence its latest turnaround plan is working.
After over a decade of failed revival efforts, M&S under chief executive Stuart Machin is reaping the rewards of a costly programme to improve the value and quality of its food and clothing, overhaul its store estate, upgrade its technology and e-commerce operations and modernise its supply chain.
The group made profit before tax and adjusting items of £407.8 millionin the six months to 28 September - ahead of analysts' consensus forecast of £361m and the £348.m made in the same period last year.
Revenue rose 5.7 per cent to £6.48 billion, with food sales up 8.1 per cent and clothing and homeware sales up 4.7 per cent.
"In the first five weeks of the second half overall trading remains on track and we are confident of making further progress in the remainder of the year," M&S said.
The Co-op said it will install 300 new front-of-store digital media screens to turbo-charge its retail media offering, taking the total number of screens to over 9,000 across its store estate.
In partnership with SMG – the UK’s leading independent retail media operator – the move will expand the Co-op Media Network’s (CMN) digital capabilities and enable FMCG brands to deepen their engagement across Co-op’s convenience stores.
The rollout will see digital screens introduced to 300 of Co-op’s highest footfall, urban locations, including Greater London (12%), Greater Manchester (5%) and North Yorkshire (2.5%), with 24 stores planned to go live each week until January 2025.
These new front-of-store media touch points will take the total number of digital screens across Co-op’s 2,400 stores to over 9,300 – including its current kiosk and customer facing screens at manned tills – providing multiple opportunities for brands to work with CMN on their in-store campaigns, focusing on key missions such as food-to-go, food-for-later and treat occasions.
“We’re the experts in convenience, and given our unparalleled shopper footfall, we want brands that invest with us to realise that retail media spend in Co-op stores can yield significant results that can importantly be measured, with a consistent return on investment across the board,” Matt Hood, managing director of Co-op Food, said.
The screens will be placed either at the entrance to the store, in the store foyer, or an outward-facing window close to the entrance. Situated in busy urban areas and embedded into local communities, these screens will be visible not only to store visitors but also to the significant number of passers-by, offering added value and exposure for advertisers.
Lee LeFeuvre, chief commercial officer, at SMG said: “With more than 90 per cent of grocery purchases still happening in-store, we are seeing a huge wave of digitisation across retailer store estates. We're proud to see Co-op are at the forefront of this movement in the convenience sector. For brands, Co-op’s investment in digital screens is significant. It offers the opportunity to connect with Co-op customers throughout the shopper journey, as well as at the point of purchase through dynamic, personalised and creative content that is proven to drive action.”